SAMOHI — A partnership between City Hall and the Santa Monica-Malibu Unified School District to renovate and expand Santa Monica High School with new athletic and arts facilities has hit a snag, with the initial $57 million for the project in limbo because of a provision in state law that governs Redevelopment Agency finances.

City Hall lawyers say they’re looking into finding a way around the problem but haven’t yet come up with a solution.

The City Council allocated the $57 million for the project, known as the Civic Center Joint-Use Project, last November, but so far none of the money has been spent on planning efforts.

The delay in dispersing the funds has to do with a technicality of Redevelopment Agency code.

Under California law, redevelopment agencies, which raise money through higher property taxes in redevelopment zones, are required to “pass through” a portion of their funding to school districts.

In Santa Monica, the redevelopment agency has passed through amounts ranging from $1.3 million to $2.7 million annually to the school district in the past five years, according to SMMUSD Chief Financial Officer Jan Maez.

The pass-through money, though, would be reduced or eliminated under state law if the district starts spending the $57 million earmarked for the Samohi expansion.

That’s a problem, Maez said, because the pass-through money is being spent to pay a debt obligation the district incurred in order to occupy its headquarters.

(Only a portion of the pass-through money is a windfall for the district, Maez said. Forty-three percent of it simply replaces funding the state would otherwise transfer to the district, while the other 57 percent is an add-on to the district’s budget used for capital projects, she said.)

“I’m optimistic that there is a resolution and we have a lot of motivation on both the district and the city’s part to resolve it,” Maez said of the issue. “People want to find a resolution to this, it’s clearly not something that one or the other of us is using to stonewall the project at all. It’s just part of what we have to figure out.”

At City Hall, Chief Deputy City Attorney Alan Seltzer said a meeting is planned to discuss the joint partnership in early November. He declined to discuss possible options for allowing SMMUSD to access the $57 million in redevelopment money.

“People are still committed to addressing the issue of funding the [Civic Center Joint-Use Project]. The work is to identify how to address the pass though,” he said.

While few details were available, officials said the dilemma has not delayed groundbreaking, since planning has been ongoing even without spending the $57 million.

In order to temporarily sidestep the issue, the City Council this month approved $1.1 million for SMMUSD to conduct planning, design and environmental review work related to the project out of a non-redevelopment agency budget.

Officials said that money, though, would ultimately come out of the original $57 million committed to the project.

nickt@smdp.com

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